Legislature(1993 - 1994)
03/03/1994 08:00 AM House STA
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE STATE AFFAIRS STANDING COMMITTEE
March 3, 1994
8:00 a.m.
MEMBERS PRESENT
Representative Al Vezey, Chairman
Representative Pete Kott, Vice Chairman
Representative Gary Davis
Representative Harley Olberg
Representative Jerry Sanders
MEMBERS ABSENT
Representative Bettye Davis
Representative Fran Ulmer
COMMITTEE CALENDAR
HB 378: "An Act relating to the Older Alaskans
Commission and staff of the commission;
changing the name of the Older Alaskans
Commission to the Alaska Commission on Aging
and extending the termination date of the
commission; relating to the Alaska Pioneers'
Homes Advisory Board; relating to services
and programs for older Alaskans; and providing
for an effective date."
PASSED OUT OF COMMITTEE
HB 392: "An Act relating to the confidentiality of
permanent fund dividend application information;
relating to the permanent fund dividend program;
and providing for an effective date."
PASSED OUT OF COMMITTEE AS A COMMITTEE SUBSTITUTE
*HB 400: "An Act relating to administrative proceedings
involving a determination of eligibility for a
permanent fund dividend or authority to claim
a dividend on behalf of another."
PASSED OUT OF COMMITTEE
*HB 408: "An Act setting a maximum rate of interest that
may be charged on a loan guaranteed by the
Alaska Industrial Development and Export
Authority under its export assistance program;
and annulling a portion of a current regulation
of the Alaska Industrial Development and Export
Authority that establishes the maximum allowable
interest on a guaranteed loan to be computed at
a different rate."
HELD OVER
*HB 358: "An Act allowing a mobile home owner to request
a certificate of title from the Department of
Public Safety."
HELD OVER
SB 128 "An Act relating to legislative audits."
HELD OVER
WITNESS REGISTER
REPRESENTATIVE JOE GREEN
Alaska State Legislature
Alaska State Capitol, Room 114
Juneau, AK 99811
Phone: 465-4931
POSITION STATEMENT: Sponsor of HB 400 and HB 408
MELINDA GREENING, Staff
Representative Joe Green
Alaska State Capitol, Room 114
Juneau, AK 99811
Phone: 465-4931
POSITION STATEMENT: Gave overview of HB 400
JOHN DELANO, Deputy Director of Credit
Alaska Industrial Development and Export Authority
480 W. Tudor
Anchorage, AK 99503
Phone: 561-8050
POSITION STATEMENT: Answered questions on HB 408
PATRICK LOUNSBURY, Staff
Representative Brian Porter
Alaska State Capitol, Room 122
Juneau, AK 99811
Phone: 465-4930
POSITION STATEMENT: Gave the sponsor statement for HB 358
TRACI WALKER, Manager
Thunder Mountain Mobile Home Park
8479 Thunder Mountain Rd.
Juneau, AK 99801
Phone: 789-7555
POSITION STATEMENT: Testified in favor of HB 358
KATE CAMPBELL, Resident
Churchill Way Mobile Home Park
5905 Churchill Way #54
Juneau, AK 99801
Phone: 780-4298
POSITION STATEMENT: Testified in favor of HB 358
JUANITA HENSLEY, Chief, Drivers Services
Division of Motor Vehicles
Department of Public Safety
P.O. Box 20020
Juneau, AK 99802
Phone: 465-2650
POSITION STATEMENT: Answered questions on HB 358
RICHARD VITALE, Staff
Representative Sean Parnell
Alaska State Capitol, Room 513
Juneau, AK 99811
Phone: 465-2995
POSITION STATEMENT: Answered questions on HB 392
PREVIOUS ACTION
BILL: HB 378
SHORT TITLE: REVISE OLDER ALASKANS COMMISSION
SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR
JRN-DATE JRN-PG ACTION
01/14/94 2072 (H) READ THE FIRST TIME/REFERRAL(S)
01/14/94 2072 (H) STATE AFFAIRS, HES, FINANCE
01/14/94 2072 (H) -ZERO FISCAL NOTE (ADM) 1/14/94
01/14/94 2073 (H) GOVERNOR'S TRANSMITTAL LETTER
02/24/94 (H) STA AT 08:00 AM CAPITOL 102
02/24/94 (H) MINUTE(STA)
BILL: HB 392
SHORT TITLE: PERMANENT FUND DIVIDEND PROGRAM
SPONSOR(S): REPRESENTATIVE(S) PARNELL
JRN-DATE JRN-PG ACTION
01/21/94 2125 (H) READ THE FIRST TIME/REFERRAL(S)
01/21/94 2125 (H) STATE AFFIARS,JUDICIARY,FINANCE
02/22/94 (H) STA AT 08:00 AM CAPITOL 102
02/22/94 (H) MINUTE(STA)
03/03/94 (H) STA AT 08:00 AM CAPITOL 102
BILL: HB 400
SHORT TITLE: PFD ADMINISTRATIVE PROCEEDINGS
SPONSOR(S): REPRESENTATIVE(S) GREEN
JRN-DATE JRN-PG ACTION
01/26/94 2154 (H) READ THE FIRST TIME/REFERRAL(S)
01/26/94 2154 (H) STATE AFFAIRS, FINANCE
03/03/94 (H) STA AT 08:00 AM CAPITOL 102
BILL: HB 408
SHORT TITLE: AIDEA EXPORT ASSISTANCE PROGRAM LOANS
SPONSOR(S): REPRESENTATIVE(S) GREEN
JRN-DATE JRN-PG ACTION
01/27/94 2166 (H) READ THE FIRST TIME/REFERRAL(S)
01/27/94 2166 (H) STATE AFFAIRS, FINANCE
03/03/94 (H) STA AT 08:00 AM CAPITOL 102
BILL: HB 358
SHORT TITLE: MOBILE HOME CERTIFICATES OF TITLE
SPONSOR(S): REPRESENTATIVE(S) PORTER,Mulder
JRN-DATE JRN-PG ACTION
01/10/94 2021 (H) READ THE FIRST TIME/REFERRAL(S)
01/10/94 2022 (H) STATE AFFAIRS, FINANCE
03/03/94 (H) STA AT 08:00 AM CAPITOL 102
BILL: SB 128 SHORT TITLE: LEGISLATIVE AUDITS
SPONSOR(S): RULES BY REQUEST OF LEGISLATIVE BUDGET AND AUDIT
JRN-DATE JRN-PG ACTION
02/22/93 440 (S) READ THE FIRST TIME/REFERRAL(S)
02/22/93 440 (S) STATE AFFAIRS, FINANCE
03/10/93 (S) STA AT 9:00 AM BUTRVICH RM 205
03/10/93 (S) MINUTE(STA)
03/17/93 (S) STA AT 9:00 AM BUTRVICH RM 205
03/17/93 (S) MINUTE(STA)
03/18/93 845 (S) STA RPT CS 1DP 3NR SAME TITLE
03/18/93 846 (S) ZERO FISCAL NOTE TO SB & CS
(S.STA/GOV)
04/12/93 (S) FIN AT 9:00 AM SENATE FIN 518
04/12/93 (S) MINUTE(FIN)
04/14/93 1353 (S) FIN RPT 6DP 1NR (STA)CS
04/14/93 1354 (S) PREVIOUS ZERO FN (S.STA/GOV)
04/14/93 1353 (S) LETTER OF INTENT W/ FIN REPORT
04/13/93 (S) MINUTE(FIN)
04/14/93 (S) FIN AT 8:30 AM SENATE FIN 518
04/14/93 (S) MINUTE(FIN)
04/14/93 (S) MINUTE(RLS)
04/17/93 (S) MINUTE(SSA)
04/23/93 1693 (S) RULES 3 CAL 1NR 4/23/93
04/23/93 1694 (S) READ THE SECOND TIME
04/23/93 1694 (S) STA CS ADOPTED UNAN CONSENT
04/23/93 1695 (S) ADVANCE TO THIRD READING
FAILED Y12 N8
04/23/93 1695 (S) THIRD READING 4/24 CALENDAR
04/24/93 1741 (S) READ THE THIRD TIME
CSSB 128(STA)
04/24/93 1741 (S) (S) ADOPTED FIN LETTER OF
INTENT
04/24/93 1741 (S) PASSED Y20 N-
04/24/93 1746 (S) TRANSMITTED TO (H)
04/27/93 1552 (H) READ THE FIRST TIME/REFERRAL(S)
04/27/93 1552 (H) STATE AFFAIRS, FINANCE
01/29/94 (H) STA AT 08:00 AM CAPITOL 102
01/29/94 (H) MINUTE(STA)
02/15/94 (H) STA AT 08:00 AM CAPITOL 102
02/15/94 (H) MINUTE(STA)
03/01/94 (H) STA AT 08:00 AM CAPITOL 102
03/01/94 (H) MINUTE(STA)
ACTION NARRATIVE
TAPE 94-20, SIDE A
Number 000
HB 378 - REVISE OLDER ALASKANS COMMISSION
CHAIRMAN AL VEZEY called the meeting to order at 8:03 a.m.
Members present were REPRESENTATIVES KOTT, SANDERS, G.
DAVIS, and OLBERG. Under bills previously heard, CHAIRMAN
VEZEY opened HB 378 for discussion. He stated the committee
should have before them a copy of the latest committee
substitute. The committee had adopted in a previous
meeting, REPRESENTATIVE G. DAVIS's amendment, which would
change the person who would chair the committee from being
appointed by the Governor, to being elected by the
committee. CHAIRMAN VEZEY asked the committee for their
opinion of the editing by the statute writer on page 2, line
25, where the word "chairman" has been changed to "chair",
and on page 2, line 31, the word "chairperson" has been
changed to "chair."
REPRESENTATIVE GARY DAVIS replied he was neutral about the
changes.
CHAIRMAN VEZEY expressed that he did not care for the
terminology. He asked the committee's pleasure.
(REPRESENTATIVE SANDERS left the meeting at 8:05 a.m.)
Number 060
REPRESENTATIVE HARLEY OLBERG stated the bill would be heard
again in HESS and should be passed on.
Number 072
REPRESENTATIVE G. DAVIS moved CSHB 378 be passed from
committee with the fiscal notes attached.
Number 085
CHAIRMAN VEZEY recognized the motion, the committee
secretary called the roll, and CSHB 378 passed from the
House State Affairs Committee.
HB 392 - PERMANENT FUND DIVIDEND PROGRAM
CHAIRMAN VEZEY opened HB 392 for discussion. A new
committee substitute is being prepared, however, it is not
yet completed.
CHAIRMAN VEZEY said the committee did have a Version O of
the committee substitute dated 2/24/94, before them, which
incorporated the change from a previous hearing on page 5,
line 7. The committee substitute adds the bright-line
distinction that an individual is not eligible for a
dividend and each of the five dividends preceding that
dividend, if the individual is absent for more than 180 days
during the qualifying period. He clarified an individual
could only have an excused absence for five years. After
that time, the dividend would be denied, except for medical
reasons as outlined in lines 10-13.
CHAIRMAN VEZEY stated another discussed amendment from the
previous hearing, however not adopted, was placed into the
committee substitute on page 4, line 11. He felt Version O
of the committee substitute dated 2/24/94, should not be
adopted by the committee, but the committee should vote to
adopt the wording found on page 5, lines 7-13, of Version O,
of the committee substitute, dated 2/24/94.
REPRESENTATIVE G. DAVIS asked if the change was under
allowable absences.
Number 145
CHAIRMAN VEZEY responded the change was under allowable
absences, drawing a bright-line at five years, unless out of
the state for medical reasons.
Number 147
REPRESENTATIVE G. DAVIS asked if it meant five consecutive
years.
Number 148
CHAIRMAN VEZEY confirmed REPRESENTATIVE G. DAVIS. He
believed the committee was in favor of a bright-line
distinction at the last hearing.
Number 156
REPRESENTATIVE G. DAVIS felt five years may be too long. He
would prefer to "ratchet down" as many allowable absences as
possible.
Number 171
REPRESENTATIVE OLBERG gave an example of a career military
pilot in his district who has no intention of relinquishing
his Alaskan residency, but may spend most of 20 years
outside of Alaska. He periodically comes back to visit
family.
CHAIRMAN VEZEY responded, the change states, in essence, if
a person is out of the state for five years, they are not
eligible for a dividend. Currently, if a person is absent
for 180 days a year or more than five years, they are
considerably scrutinized by the Permanent Fund Dividend
(PFD) Division.
Number 191
REPRESENTATIVE OLBERG stated number 6, serving on active
duty as a member of the Armed Forces of the United States,
is an allowable absence. His constituent, however, is
having difficulty getting his dividend.
REPRESENTATIVE G. DAVIS clarified that REPRESENTATIVE
OLBERG's constituent was active.
Number 197
CHAIRMAN VEZEY believed REPRESENTATIVE OLBERG's constituent
would have received a dividend under subparagraph 6 of
section 5, "serving on active duty as a member of the armed
forces," but he has probably been out of the state for five
years. The PFD gives considerable scrutiny to those
persons. The intent of the change is to merely codify a
bright-line at five years, there is no administrative
judgment involved.
REPRESENTATIVE OLBERG did not have a problem with the
change.
CHAIRMAN VEZEY stated the new committee substitute would be
drafted and he would expect the committee to adopt it and
pass it out.
HB 378 - REVISE OLDER ALASKANS COMMISSION
CHAIRMAN VEZEY explained the committee substitute for HB
378, just passed out of committee had not been formally
adopted, therefore, he reopened HB 378.
Number 227
REPRESENTATIVE PETE KOTT moved the committee rescind their
action on CSHB 378 for the purpose of adopting the committee
substitute.
CHAIRMAN VEZEY clarified the proper order would not be to
rescind, but to reconsider. Understanding REPRESENTATIVE
KOTT's intent, the motion was recognized and hearing no
objection the CSHB 378 was adopted.
CHAIRMAN VEZEY asked if REPRESENTATIVE KOTT would like to
move to pass CSHB 378 from the House State Affairs
Committee.
Number 236
REPRESENTATIVE KOTT so moved.
Number 238
CHAIRMAN VEZEY recognized the motion, the committee
secretary called the roll, and CSHB 378 passed from the
House State Affairs Committee.
HB 392 - PERMANENT FUND DIVIDEND PROGRAM
CHAIRMAN VEZEY announced HB 392 would be readdressed at a
later date.
HB 400 - PFD ADMINISTRATIVE PROCEEDINGS
CHAIRMAN VEZEY opened discussion on HB 400 and introduced
REPRESENTATIVE JOE GREEN.
Number 257
REPRESENTATIVE JOE GREEN, sponsor of HB 400, stated MELINDA
GREENING from his staff, was available to present HB 400 to
the committee.
Number 260
MELINDA GREENING, STAFF FOR REPRESENTATIVE JOE GREEN, gave
an overview of HB 400. She said HB 400 was prepared because
of complaints received from constituents regarding the
length of time to process PFD appeals. REPRESENTATIVE GREEN
felt the length of time some of his constituents have had to
wait in the appeals process was unacceptable. The length of
time to process appeals is directly related to the high
number of appeals received. She stated, HB 400 addresses
the huge number of appeals filed. As of January 1, 1994,
there were 9,579 appeals pending, the highest number since
the PFD program's inception. She knew of one District 10
resident who has waited 18 months and others may have waited
longer. Currently there are ten permanent full-time
employees in the PFD Division and three appeals officers, in
the commissioners' office, who are working on processing the
appeals. Because there is no cost to appeal, other than .29
cents for a stamp, people who are clearly unqualified
protest their denials because they have the opportunity to
do so at no cost or risk to themselves. The 1994 denial
rate was 64 percent, lower than in previous years.
MS. GREENING said HB 400 would implement a $25 filing fee
for individuals protesting the denial of their permanent
fund appeal application. The fee would be refundable if the
appeal is successful, and nonrefundable if the denial is not
overturned. She said it is anticipated the implementation
of a filing fee would discourage individuals clearly
unqualified from appealing, thereby reducing costs, which
are deducted from the amount of the dividend, and making the
appeal process shorter for those with legitimate claims.
Since the administrative costs are deducted out of each
recipients PFD check, the reduced cost would mean a larger
check for each eligible Alaskan.
Number 314
CHAIRMAN VEZEY heard no questions and asked the pleasure of
the committee.
Number 317
REPRESENTATIVE G. DAVIS moved to pass HB 400 from committee
with individual recommendations.
Number 319
CHAIRMAN VEZEY recognized the motion, the secretary called
the roll, and HB 400 passed from the House State Affairs
Committee with individual recommendations.
HB 408 - AIDEA EXPORT ASSISTANCE PROGRAM LOANS
CHAIRMAN VEZEY opened discussion on HB 408.
Number 330
REPRESENTATIVE GREEN, sponsor of HB 408, gave a sponsor
statement. He said, Chapter 42, SLA 1987, provided for the
Alaska Industrial Development Authority to add an Export
Financing Guarantee program to its' portfolio, and change
the name, at that time, to the Alaska Industrial Development
and Export Authority (AIDEA). Six years later, AIDEA has
yet to guarantee an export transaction with this program.
REPRESENTATIVE GREEN stated HB 408 is an attempt to make the
export program work. The problem is that current AIDEA
regulations impose a ceiling on the interest commercial
lenders may charge when participating in this program. The
lesser of the rate charge, under the promissory note, of one
percent above the U.S. Treasury Note rate, at 3.5 percent,
means commercial banks could charge no more than about 4.5
percent interest on a loan. This restriction effectively
kills the program because no commercial lender would lend
money at 4.5 percent.
REPRESENTATIVE GREEN said, somewhat similar to the export
assistance program, AIDEA also has a business assistance
program. The interest rate for banks is this program is in
the same statute, however, it is substantially higher
allowing lenders to charge 2.75 percent above the prime
rate. At the current prime rate of six percent, a
commercial bank could charge as much as 8.75 percent
interest. The Federal Small Business Administration (SBA)
program also allows this interest to go to 2.75 percent
above the prime rate.
REPRESENTATIVE GREEN stated that HB 408 establishes the same
interest rate for the export program, as exists for the
business assistance program. The export program will become
more attractive to commercial lenders. He noted the export
assistance program is a loan guarantee, not a state loan. A
potential exporter could go to a commercial bank, and if
they qualify, get a commercial loan at any time, but if the
exporter seems at all risky, the bank could use this program
to reduce that risk. AIDEA would assume that risk, because
it has a mechanism to reinsure itself which would reduce its
exposure.
REPRESENTATIVE GREEN stated managers at AIDEA recognize the
export program is not working and they have begun to work
with banks and the Department of Commerce to fix it. It is
his opinion that between these statutory changes and some
changes in AIDEA's regulations, banks might be willing to
use this program and that would be an important tool for
small businesses. REPRESENTATIVE GREEN stated he was
serious about fixing the problems and if it could not be
done in the regulations, he would try to introduce something
to fix it through statute.
Number 389
CHAIRMAN VEZEY asked which program under AIDEA is limited to
one percent over the six month treasury note.
REPRESENTATIVE GREEN replied the export program. He
understood the oddity of trying to help a program by
increasing its ability to charge more interest. He
clarified the problem to be small export potentials, which
there are many in Alaska, need to be financed.
Number 402
CHAIRMAN VEZEY stated AIDEA is providing the guarantee, not
the loan.
REPRESENTATIVE GREEN agreed. He gave an example of a man
named Jones, who may not have a good enough idea for a very
restrictive bank, but it may pass the AIDEA test. AIDEA
would guarantee him. If Jones were to then go under, he
clarified, AIDEA would not exactly have to pick up the tab,
because AIDEA reinsures itself with a .5 percent charge
which the applicant pays. If Jones had gotten 8.75 percent,
the loan he would have actually been paying would have been
at 9 percent, therefore, 25.25 percent would be a
reinsurance program that AIDEA would not get stuck with the
bill. AIDEA acts as an intermediary.
Number 415
CHAIRMAN VEZEY did not believe the legislature had the
foresight in 1987 to see the short-term interest rates drop
so dramatically below the long-term rates. He was concerned
that if the number of loan guarantees was increased the
reserves for loan losses would have to be increased,
requiring a fiscal note.
REPRESENTATIVE GREEN responded the AIDEA program does not
put up the money, the bank does. If AIDEA is held as a
default, they would look to their reinsurer to pay the
difference.
CHAIRMAN VEZEY asked if AIDEA buys loan insurance.
REPRESENTATIVE GREEN confirmed.
REPRESENTATIVE G. DAVIS questioned if the insurance was
bought from another state agency.
Number 437
REPRESENTATIVE GREEN said no, it was more like a "LLoyd's of
London type of thing."
Number 438
CHAIRMAN VEZEY thought AIDEA would use their investments to
secure loans.
REPRESENTATIVE GREEN said no, that way state capital is not
tied up.
Number 440
CHAIRMAN VEZEY commented that if activity is anticipated to
increase, increased insurance premiums for loan insurance
should be expected.
Number 442
REPRESENTATIVE GREEN said an increase in premiums was
possible. He speculated, if there were a specific number of
loans at a quarter of a percent, and the insurance carriers
felt AIDEA was getting too much exposure, and they wanted to
raise to a half a percent, there would be some loans with a
quarter override and some that are higher interest override.
This would be paid by the borrower. HB 408 would bring both
the export program and the small business program to equal
terms.
CHAIRMAN VEZEY clarified HB 408 would annul the one percent
above the treasury note in code, not in statute. 3 AAC
99.650 would be annulled.
CHAIRMAN VEZEY moved to the Anchorage teleconference site.
Number 467
JOHN DELANO, DEPUTY DIRECTOR OF CREDIT, AIDEA, commented and
answered questions on HB 408. He felt the problems which HB
408 addresses could be taken care of through regulations.
The interest rate is only established by regulation. AIDEA
does not have the legislative history or the corporate
memory because those involved in suing the regulations are
no longer with the authority. There have been attempts by
several staff members of AIDEA to meet with banks, OIT, and
other interested parties to make the export program more
attractive. AIDEA would not have a problem changing the
interest rate through regulation.
Number 484
CHAIRMAN VEZEY could not see banks wanting to loan at 4.5
percent, even if they could get money from the Federal
Reserve banks for 2.5 percent. He believed the low interest
rate had been in effect for at least three years.
MR. DELANO replied, "at least."
CHAIRMAN VEZEY thought it was a regulatory interest rate and
[we] seem a little a slow to react to the market.
Number 495
MR. DELANO responded the interest rate discussed would be
the interest rate AIDEA would pay off in the event they have
to honor the guarantee, in the event of default by the
borrower. He clarified the bank can charge any rate they
choose. The index in 1987 was probably substantially
higher, twice as high as it is currently, when the
regulation was made.
Number 505
REPRESENTATIVE GREEN inquired, if that were the case
wouldn't there still be a restriction or difficulty for a
borrower if they went to a bank, and the bank may have
reservations that AIDEA is not supporting them for the full
amount they want to commit their money to.
Number 510
MR. DELANO stated this scenario was very possible. That's
why AIDEA has absolutely no objection to increasing the rate
to be commensurate with the same rate charged in the
business assistance program, prime plus 2.75. He felt this
may comfort banks so in the event of default, they may know
the amount of interest they would collect on the defaulted
amount of money.
Number 515
CHAIRMAN VEZEY clarified 3 AAC 99.650 sets the interest
rates for the loan guarantee and not the loan.
MR. DELANO confirmed that was correct.
Number 520
CHAIRMAN VEZEY asked what the response is from the
commercial lending institutions to 3 AAC 99.650.
MR. DELANO replied the concern of banks was they wanted to
know the interest rate AIDEA will pay them in the event the
guarantee would have to be honored. They felt the interest
rate should be raised. AIDEA did not have objections to
this. He stated the underwriting by both the bank and AIDEA
is generally conservative enough that AIDEA does not view a
lot of risk in the guarantees. The moneys guaranteed are
contingent liabilities of the AIDEA and under the business
assistance program, for example, AIDEA has only had to pay
off one guarantee since the program was instituted. They
paid off about 25 percent of the total guaranteed amount.
Number 540
REPRESENTATIVE GREEN clarified one loan defaulted under the
business assistance program and asked how many loans had
been granted.
Number 543
MR. DELANO answered there are currently 14 or 15 on the
books, however, the total amount of outstanding guarantees
is just short of $1 million. The export program had not
been utilized because it is similar to the U.S. Small
Business Administration, a federal guarantee, which is more
liberal and banks have used it since the late 1940s.
AIDEA's export program is more attractive than the federal
program for financing inventory and accounts receivable
because of greater limits, $1 million versus $750,000.
Number 553
REPRESENTATIVE GREEN commented there are some 15 loans under
that program and zero under the export program, and asked if
that was because of the difference in the types of people or
businesses that would be involved or because they are more
apt to get loans from banks with a higher guarantee from
AIDEA.
Number 560
MR. DELANO responded he thought the export program was
partially not used because AIDEA does not know if the
participant volume exists in this area. Several people have
come in with interest in this area, but in talking to them,
their needs tend to fit the business assistance program.
Number 575
REPRESENTATIVE GREEN reiterated AIDEA has no objection to
modifying the interest rate in regulation. He then asked if
[we] could be assured that if HB 400 was not pursued, it
would be done in regulations.
Number 580
MR. DELANO said yes, AIDEA could do it.
Number 581
REPRESENTATIVE GREEN suggested HB 408 be pulled off the
table with that assurance. In an effort to make the change
more proactive, rather than negative, he offered that page
1, line 7, the (b) portion of the existing regulations which
now read, "the authority may not guarantee a loan unless the
authority finds that the guarantee is reasonably necessary,"
should be modified to read, "that the authority may
guarantee a loan if the authority finds that the guarantee
is reasonably necessary." The thrust would change to more
positive wording.
Number 597
REPRESENTATIVE G. DAVIS asked MR. DELANO about the previous
loan being considered under the export authority, that was
later found to fit better under the business assistance
program. He could not imagine an export loan that would not
fit under the business assistance program and asked if this
was why the export program had not been used.
Number 605
MR. DELANO responded long-term contracts and revolving
credit can fall under business assistance, and he believed
the statutes and regulations were written more with the
intent of specific transactions. AIDEA felt continuing
relationships are served better under the business
assistance program because guarantees can be issued for one
year, and they can get renewals for four additional years.
Number 626
REPRESENTATIVE GREEN asked if AIDEA can handle the exporters
through regulation and still get loan requests through small
business, is there a need for the export authority. He
asked if there were people working in this category.
Number 629
MR. DELANO replied no one is specifically working in the
export area, but several AIDEA employees are familiar with
the program and are trying to work with it. If there was a
request to have a designated employee for the program, one
of three officers who does underwriting for the authority
would be chosen. He stated the need for the export
authority had been deliberated over and because of its lack
of use and misunderstanding of intent, AIDEA would like to
amend the program to be usable or dispense of it and the
financing will be taken care of under business assistance.
Number 641
REPRESENTATIVE GREEN asked if AIDEA would take care of the
export program in the reasonable future.
(REPRESENTATIVE OLBERG left the meeting at 8:42 a.m.)
Number 645
MR. DELANO answered AIDEA is prepared to make the regulation
changes and it should not take too long. They have no
objection to making the changes, however, they are not so
sure it will induce the banks to make presentations to them.
He suggested AIDEA talk to the banks and find out what will
make the export program attractive to them. Depending upon
the response of the banks, AIDEA could report back the
options of whether the program will be changed or dispensed
with.
Number 661
REPRESENTATIVE GREEN asked if there was currently a director
of AIDEA.
Number 662
MR. DELANO answered the executive director is Riley Snell.
(REPRESENTATIVE OLBERG returned to the meeting at 8:45 a.m.)
Number 663
REPRESENTATIVE GREEN asked if the executive director would
then refocus his attentions to other duties and AIDEA would
not have personnel involved with the export program that
would no longer be needed.
Number 664
MR. DELANO responded there would not be unnecessary
personnel and their workload would not be impacted unless
the program was kept.
Number 665
REPRESENTATIVE GREEN suggested HB 408 be held until he could
receive further information from AIDEA and he would
readdress the committee at a later date.
Number 675
CHAIRMAN VEZEY accepted REPRESENTATIVE GREEN's suggestion
and held HB 408 in the House State Affairs Committee for
further study.
CHAIRMAN VEZEY called a recess at 8:48 a.m.
TAPE 94-20, SIDE B
Number 000
HB 358 - MOBILE HOME REGISTRATION & TITLES
CHAIRMAN VEZEY reconvened the meeting at 8:57 a.m. CSHB 358
was opened for discussion.
CSHB 358: "An Act requiring a mobile home owner to obtain a
certificate of title and requiring the Department of Public
Safety to issue a certificate of title to a mobile home
owner."
Number 011
PATRICK LOUNSBURY, STAFF FOR REPRESENTATIVE BRIAN PORTER,
gave the sponsor statement for HB 358. He said, in 1992,
the Governor's Omnibus and Fee Reduction bill eliminated the
mobile registration service and the state's ability to issue
titles to mobile home owners. Without a title, there is no
certain way to determine a person selling a mobile home is
the real owner, or whether they first must pay off a lean
holder. HB 358 would give mobile home owners a tool to
facilitate honest transactions. He noted dealers, financial
institutions, consumers, and owners are all agree they
should pay an appropriate fee to maintain the cost of
maintaining a title system.
Number 049
CHAIRMAN VEZEY noted he did not have a title on his home,
which is real property.
Number 057
MR. LOUNSBURY responded real property uses another form,
rather than mobile homes which currently do not have
documentation.
Number 066
CHAIRMAN VEZEY pointed out he owns a large amount of
expensive equipment which also does not have titles.
Number 071
MR. LOUNSBURY stated businesses are required by law to
provide titles; however, individuals are not as structured.
Therefore, documentation is needed to facilitate the selling
of mobile homes.
(REPRESENTATIVE SANDERS returned to the meeting at 9:00
a.m.)
Number 087
REPRESENTATIVE G. DAVIS responded to CHAIRMAN VEZEY's
comment that he did not have a title to his home. He
commented that it may be cheaper to receive a title to his
home, instead of the process that we currently go through to
assure lenders that we do properly own our residences.
Number 095
CHAIRMAN VEZEY pointed out a title does not actually
guarantee ownership. People often legally buy and sell
items without changing the title.
Number 112
REPRESENTATIVE KOTT moved to adopt the committee substitute
to HB 358, version K.
CHAIRMAN VEZEY recognized the motion, the committee
secretary called the roll, and the CSHB 358, version K, was
adopted.
Number 129
REPRESENTATIVE KOTT asked MR. LOUNSBURY to explain the
differences between the original HB 358 and CSHB 358.
Number 132
MR. LOUNSBURY responded the committee substitute was
introduced to tighten up the title, so when it goes over to
the Senate, they could not add anything on to it. CSHB 358
reads, "An act requiring a mobile home owner," instead of,
"An act allowing." CSHB 358 also raises the fee from $50 to
$100 to generate an effective program for the state in terms
of cost responsibility, which was approved by the home
owners, realtors and banks.
Number 154
CHAIRMAN VEZEY pointed out the fiscal note was for the
original HB 358.
REPRESENTATIVE OLBERG clarified the fiscal note states it is
for the sponsor substitute dated March 2, 1994; however, he
believed it was intended for the committee substitute.
CHAIRMAN VEZEY replied JUANITA HENSLEY signed the fiscal
note and the committee would clarify her intent when she
testified.
Number 172
TRACI WALKER, MANAGER, THUNDER MOUNTAIN MOBILE HOME PARK,
testified in favor of CSHB 358. She felt anyone could claim
ownership to a mobile home and a system was needed to keep
track of them. Mobile homes are taxed by municipalities as
real property. She asked if the fee charged for a title
would include a history search and if there would be
assurance that the chain of title would remain on file. She
continued the new types of mobile homes currently fabricated
are sturdy, lasting many years, and possibly changing
ownership at least a dozen times. She stressed banks were
very difficult to deal with without proof of ownership. She
stated an example of a couple having bought a mobile home,
not transferring the title, fixed it up, sold it again, and
the original owner has passed away. The people who are
buying the home have paid it off, the middle couple has a
title with the deceased's name on it and no bill of sale,
and there is no one to prove they bought it. With a title
standard, this type of confusion could be avoided. She also
felt some people may begin to resell the same mobile home
repeatedly and there would not be any proof of who owns it.
Number 231
CHAIRMAN VEZEY commented there is also a lot of real
property in the state which is in the same dilemma. He
asked MS. WALKER if it was her testimony that at this time a
title does not guarantee who the owner is?
Number 238
MS. WALKER replied, on the surface a title does not.
Number 240
CHAIRMAN VEZEY clarified owners, sellers, and operators of
mobile home parks need a system to provide a chain of title.
Number 244
MS. WALKER agreed.
Number 248
CHAIRMAN VEZEY stated ROD HULSE, SWITZER VILLAGE, deferred
his testimony, but he was available to testify.
Number 257
KATE CAMPBELL, RESIDENT of CHURCHILL WAY MOBILE HOME PARK,
testified in favor of CSHB 358. She would like an effective
title system which would give security to title owners. She
gave an example of her and her husband's own personal
experience in buying a mobile home. After they bought their
home, they looked for a title transfer. The seller,
however, stated the title had been stolen. They have had a
very difficult time trying to locate an agency to receive an
official title from file. They could only get a computer
printout from the Juneau Division of Motor Vehicles (DMV),
which stated the seller really did own the mobile home, and
after two tries, has now received a legal bill of sale. MS.
CAMPBELL would like an official record of the title change
and would prefer a computer record at the DMV. She was
surprised at the increase in of the fee from $50 to $100.
Number 344
CHAIRMAN VEZEY suggested MS. CAMPBELL talk to an attorney to
protect her property investment.
MS. CAMPBELL preferred to not seek an attorney's help.
Number 355
REPRESENTATIVE OLBERG clarified that CHAIRMAN VEZEY was
suggesting MS. CAMPBELL should seek an attorney because of
the degree of the situation she is in.
Number 360
CHAIRMAN VEZEY pointed out there are many options available
to protect an ownership interest.
CHAIRMAN VEZEY introduced JUANITA HENSLEY, DMV, and asked
her if the DMV believes it is a proper function of DMV to
act in this role?
Number 377
JUANITA HENSLEY, DIVISION OF MOTOR VEHICLES, DEPARTMENT OF
PUBLIC SAFETY, answered questions on CSHB 358. She
responded the DMV suggested with the Governor's 1992 Omnibus
bill to delete the titling of mobile homes. DMV felt mobile
homes were a function of real property, and should be
treated as such, as opposed to a vehicle. In meeting with
REPRESENTATIVE PORTER and others over the problems in
obtaining the proper documentation on mobile homes they
agreed, providing the burden was not placed on the DMV and
the program would pay for itself, the DMV would reissue
titles to mobile homes. During this period there were title
searches through a real estate title search and the
Recorder's Office was having to do extensive research as
well in UCC filings.
DMV had requested mobile home titling be deleted from the
statute, in 1992, because titling was not required by the
owners. There was an immense amount of research to go
through, especially in cases where ownership may have
changed 4-5 times. Past files had even been purged from the
filing system making the process very labor intensive.
Prior to the mandate, as proposed in HB 408, DMV issued
approximately 200 mobile home titles a year. DMV estimates
it would issue 2,500 titles, based on information from the
industry. This figure includes the 1,500 new units sold per
year statewide by the industry, plus an additional 1,000
from individuals who may sell theirs. DMV suggested the
$100 fee believing it would not be too costly, because it
would cost more to go through the UCC filing, and also title
searches through a real estate company. MS. HENSLEY's
fiscal note indicates CSHB 358 would bring in $250,000 a
year in revenue, at an operating cost of $110,000 to the
state. DMV has no objection to titling mobile homes as long
as it pays for itself.
Number 430
CHAIRMAN VEZEY inquired if the DMV had to do a UCC search to
issue a title.
MS. HENSLEY responded that the DMV does not do a UCC search.
DMV offers a title based on a bill of sale or, if the
vehicle is new, documentation from a bank or a
manufacturer's certificate of origin. Whenever that vehicle
is sold the owner would then be required to change titles
just as motor vehicles do.
Number 439
CHAIRMAN VEZEY did not feel his constituents, of which many
live in mobile homes, would like him to pass a bill which
would require them to go in and title their home. He asked
if mobile homes were considered as real property if they
were sold in improvement to real property.
MS. HENSLEY could not answer if mobile homes were treated as
real estate property or not.
Number 449
CHAIRMAN VEZEY clarified real property refers to the fee
simple, a stake in land, and the improvements thereon. He
felt CSHB 358 would require a lot of people to have to go
and buy a title, when they may have already gone through the
recording process for real property.
Number 457
MS. HENSLEY was not familiar with the requirements for leans
by financial institutions for real property, when a mobile
home is set on it.
Number 462
CHAIRMAN VEZEY asked if MS. HENSLEY was including UCC
agreements, in the category of leans, on mobile homes.
Number 464
MS. HENSLEY responded the DMV made the suggestion to the
Governor's Omnibus bill because if, for example, a person
bought a boat, a UCC filing lean would be required if it is
financed. A person would have to pay a filing fee for banks
to file a UCC lean on the boat. DMV used to do an immense
amount of research.
Number 474
CHAIRMAN VEZEY asked the cost of filing or recording a UCC
agreement, deed, or bill of sale. He believed it was $10.
Number 479
MS. HENSLEY answered, according to information from
REPRESENTATIVE PORTER's office, titling through the DMV
would be more cost effective to the owners, even at $100.
Number 497
CHAIRMAN VEZEY asked why it costs more to record an
ownership transaction dealing with real property, than
dealing with vehicle property and titles.
Number 500
MS. HENSLEY responded real estate companies would require
full land recorder title searches and UCC title searches
even on mobile homes.
Number 514
CHAIRMAN VEZEY clarified DMV could title mobile homes
cheaper than the private sector in conjunction with the
Recorder's Office. He thought the DMV might be presumptuous
in their cost expectations and did not feel the cost of the
private sector was fair in comparison to the DMV.
Number 526
MS. HENSLEY felt the DMV was efficient and information
received back from the sponsor, from a meeting last summer
with other legislators and their constituents, regarding
mobile home owners and dealers, they felt it was very costly
to continue the current process of title acquirement.
Number 535
REPRESENTATIVE OLBERG stated the 1,500 new units sold per
year would take five minutes for the DMV, noting the
efficiency. The 1,000 used mobile home sales per year,
everyone who already has a title without too many changes of
ownership, would still be relatively simple. There will be
some titles extremely complicated. He pointed out UCC
searches and title searches are expensive.
Number 545
CHAIRMAN VEZEY stated the amount of money spent in insuring
land through searches is much more guaranteed than a title
received by DMV. He thought a type of insurance policy
which guarantees a mobile home title might be helpful.
MS. HENSLEY responded a guarantee is not available for
mobile home owners.
Number 560
CHAIRMAN VEZEY thought the guarantee was available if they
own the land the improvement sits on. A mobile home on
rented space would not have this option.
Number 562
MS. HENSLEY commented, in the municipality of Anchorage,
they show 4,884 mobile homes in parks where the land is not
usually owned. Fairbanks Community Research Center advised
they have 2,268 mobile homes in mobile home parks.
Number 570
REPRESENTATIVE OLBERG clarified when a mobile home becomes
permanently attached to the ground by foundation on a
specific piece of land, it is no longer a mobile home.
Number 575
CHAIRMAN VEZEY believed a title company would not issue
title insurance unless the owner also had a fee simple
interest in the property where the improvement sits.
REPRESENTATIVE OLBERG agreed, but the mobile home would only
be an improvement and would not relate to the property
title.
Number 581
MS. HENSLEY pointed out every mobile home without a title,
under CSHB 358, would have to get one. She did not have the
exact number, and offered CHAIRMAN VEZEY could revise the
total cost of the title down further. DMV suggested the
$100 fee to pay for the process. New and used mobile home
sales, 2,500 per year, would be the focus of the DMV.
Number 591
REPRESENTATIVE G. DAVIS stated the large amount of mobile
home owners in certain districts was of concern to him. He
clarified these owners would not have to rush down and get
titles. CSHB 358 states the DMV shall issue a certificate
of title to the owner upon application and payment. If an
owner wanted to sell their mobile home, a guarantee of
ownership could be acquired at the DMV.
Number 599
CHAIRMAN VEZEY pointed out CSHB 358 is "an Act requiring" a
mobile home owner. CSHB 358 does not distinguish between
those renting a space or those who own the property.
Number 601
REPRESENTATIVE OLBERG sensed his constituents would not all
rush down to obtain a title. He felt the vast majority of
mobile homes probably do have titles, because it's been less
than a year since the program was in effect.
Number 612
CHAIRMAN VEZEY stated mobile homes in his district have sold
numerous times, without the proper transfer of titles. In-
depth research would be involved.
Seeing no more testimony from MS. HENSLEY, CHAIRMAN VEZEY
let MS. WALKER readdress the committee.
Number 627
MS. WALKER asked MS. HENSLEY if it would be possible to set
up some kind of fee scheduling, whereby those requiring less
research could pay a lesser amount.
Number 635
CHAIRMAN VEZEY answered anything was possible and a
subcommittee would be formed to create a bill of useful
commercial purpose, and not offensive to the public.
CHAIRMAN VEZEY asked MR. LOUNSBURY to join the table. The
committee understands the intent of CSHB 358. CHAIRMAN
VEZEY suggested a subcommittee be formed and MR. LOUNSBURY
be a part of it. He would like to meet with those
knowledgeable of the legal ramifications of establishing
ownership.
MR. LOUNSBURY stated, in reference to CHAIRMAN VEZEY's
constituents, that he was informed by staff of Les Fickes,
Riverview Mobile Home Park Owner, that he would be in favor
of a bill like CSHB 358. MR. LOUNSBURY said he had no
objection with forming a subcommittee.
Number 666
CHAIRMAN VEZEY knew both Mr. Fickes and Mr. Rahoy who own
mobile parks in his districts, but believed there was a
general lack of understanding in commercial standards and
legality of ownership. He thought the committee should have
"an expanded picture."
Number 674
REPRESENTATIVE OLBERG thought "when ownership changes" could
be added to the title of the CSHB 358.
Number 679
CHAIRMAN VEZEY responded this change would make CSHB 358
more palatable. He pointed out those who buy and sell real
property are not required to record their transactions.
Number 683
REPRESENTATIVE OLBERG thought the requirement would also not
be 100 percent complied with, either.
Number 684
REPRESENTATIVE G. DAVIS proposed the title might be changed
to read, "An Act relating to a mobile home owner to obtain,"
instead of, "requiring." He noted "requiring" is the word
the committee is having problems with.
Number 689
CHAIRMAN VEZEY stated the original bill is "An Act allowing
a mobile home owner."
Number 691
REPRESENTATIVE OLBERG liked the original title better, but
questioned the concern that it was too broad.
Number 692
REPRESENTATIVE KOTT inquired if the was a companion Senate
Bill in the Senate presently.
Number 698
CHAIRMAN VEZEY paused the committee to change the tape.
TAPE 94-21, SIDE A
Number 000
CHAIRMAN VEZEY resumed the meeting.
Number 002
REPRESENTATIVE G. DAVIS felt eliminating the word
"requiring" would satisfy his concerns with CSHB 358. There
will always be those individuals who do not follow the
transfer process. He moved page 1, line 1, to read, "An Act
relating to a mobile home owner to obtain a title."
Number 034
CHAIRMAN VEZEY interjected he could entertain the motion,
however, he would like more testimony on CSHB 358 before it
is passed out of committee. He did agree flexibility needed
to be created in CSHB 358. CHAIRMAN VEZEY stated CSHB 358
would be rescheduled in the near future.
REPRESENTATIVE G. DAVIS withdrew his motion.
Number 054
REPRESENTATIVE KOTT commented the subcommittee should also
examine the fee schedule. He believed 2,500 titles at $45
would cost $112,000, which would be more appropriate.
Number 063
CHAIRMAN VEZEY referred to the time, risk and liability,
involved in doing title searches as MS. HENSLEY had
mentioned. He noted a title search could not be bought for
$100 for property.
Number 079
REPRESENTATIVE KOTT commented there may be constitutional
problems in varying the fees for those requiring less
research.
Number 088
CHAIRMAN VEZEY felt if a person could establish qualified
ownership and have it recorded for posterity, then a $100
fee would not be unreasonable.
CSHB 358 was held in committee to be rescheduled.
Number 119
SB 128 - LEGISLATIVE AUDITS
REPRESENTATIVE KOTT moved to reopen SB 128 for the purpose
of discussing it and moving it out of committee. SB 128
deals with the Office of Management and Budget (OMB) and
provides they be responsible for implementation of
discrepancies discovered in recommendations made by
Legislative Budget and Audit.
CHAIRMAN VEZEY agreed to discussion, but he was not prepared
to move it out of committee yet. He found the fiscal notes
not realistic and the costs needed to be investigated more.
Number 139
REPRESENTATIVE KOTT withdrew his motion to reopen SB 128.
HB 392 - PERMANENT FUND DIVIDEND PROGRAM
CHAIRMAN VEZEY opened the discussion on the new Version O,
dated 3/3/94 of committee substitute (CS) for HB 392. The
amendments to the CS allow exemptions for individuals
outside the state receiving medical treatment and
individuals outside the state accompanying a minor who is
receiving medical treatment.
Number 167
RICHARD VITALE clarified the CS, presently before the
committee, is the final version according to the Permanent
Fund Dividend Division.
Number 172
CHAIRMAN VEZEY understood the committee could take action on
the CS for HB 392 if the committee desires. Under the
current CS for HB 392, the only persons who would be
eligible for a dividend under category 9, if absent from the
state for 180 days a year, or five years or more, would be a
member of the U.S. Congress from Alaska.
Number 208
REPRESENTATIVE OLBERG stated on page 5, line 8, allows
absences under categories 7-9.
Number 216
CHAIRMAN VEZEY clarified category number 9 is serving as a
member of the United States Congress. An absence under
categories 7-9 is a waiver of the five year line.
Number 227
REPRESENTATIVE G. DAVIS moved to adopt Version O, dated
3/3/94 of CSHB 392, to the House State Affairs Committee.
Number 240
CHAIRMAN VEZEY recognized the motion, the secretary called
the roll, and the CSHB 392 was adopted by the House State
Affairs Committee.
Number 245
REPRESENTATIVE G. DAVIS moved CSHB 392 be passed from
committee with individual recommendations.
Number 250
CHAIRMAN VEZEY recognized the motion, the committee
secretary called the roll, and CSHB 392 was passed from the
House State Affairs Committee with individual
recommendations.
Having no more business before the committee, CHAIRMAN VEZEY
adjourned the meeting at 9:54 a.m.
| Document Name | Date/Time | Subjects |
|---|